May 21, 2013

Nixon vetoes repeal of senior renters tax credit

Governor Jay Nixon has vetoed legislation that would have repealed a tax credit for low-income seniors who rent their homes. The legislation was built into the budget proposal the legislature sent to the Governor last week.

Governor Jay Nixon

Governor Jay Nixon

House and Senate budget leaders say the Governor had initially supported cutting that credit because he built it into his budget proposal, and said his staff including Budget Director Linda Luebbering testified for the bill in legislative committee hearings.

When he said he would veto the bill unless it was part of a more comprehensive tax credit reform package, legislators decided to move forward with it in the budget. They tied funding the elimination would have created to the First Steps program, which benefits an estimated 20-thousand developmentally disabled children.

In his veto message, Nixon said the legislation did not constitute “comprehensive tax credit reform,” and called on lawmakers to protect funding for First Steps.

The legislation is SB 350.

House sends tax credit proposal to the Senate

The state House has passed legislation its sponsor calls a “starting point” for negotiations with the Senate on tax credits and incentives.

Representative Anne Zerr (photo courtesy, Tim Bommel, Missouri House Communications)

Representative Anne Zerr (photo courtesy, Tim Bommel, Missouri House Communications)

House Economic Development Committee chairwoman Anne Zerr (R-St. Charles) tells the House the legislation combines several issues that have been vetted by the chamber in recent years and in this session.

“This takes a broad-based approach to reviewing economic development tax credits. We’re capping some that aren’t currently capped, we’re cutting the cap on others and we’re extending some that are beneficial and worthy of continuance, sunset some whose effectiveness has ended and it adds four incentives that are targeted towards certain industries.”

The bill would set higher caps on tax credits for historic buildings and low-income housing development than Senate legislation. Also unlike the Senate, it would also extend a credit for developers who take up large amounts of land.

It includes streamlined business incentives and would call them “Missouri Works,” with a cap of $50 million dollars. It also contains incentives for data storage centers, exporting international cargo from Missouri airports, angel investments and research and development.

Zerr maintains the package would save the state money.

“With the cut of the tax credits in the bill we have a net savings of $73 million in reduced cap space. That’s different than authorization or issuances, I realize that.”

The legislation is HB 698.

House committee to vote on angel investor credits

A House Committee will vote next week on legislation to offer tax credits to people who invest in startup companies. Some of these so-called “angel investors” have taken their message to that committee.

Representatives Denny Hoskins (R-Warrensburg, left) and Mel Torpey (R-Independence) have sponsored the angel investor incentive bills.

Representatives Denny Hoskins (R-Warrensburg, left) and Mel Torpey (R-Independence) have sponsored the angel investor incentive bills.

One of them, Jake Holloway, acknowledged that banks and venture capital firms won’t back the kinds of startups that angel investors will. He says that is because the risk is too high and the return takes too long.

“The best upside for a bank, if they lend to one of these companies is what, 5 percent interest? 8 percent interest? That’s the only upside for them. They’re not an equity stakeholder in it, and they’re risking a lot. They’re risking their depositors capital.”

Holloway describes angel investors as people who have a higher tolerance for risk and who typically invest within 100 miles of their homes.

An attorney who represents entrepreneurs, Kristin Kelley, says the states surrounding Missouri offer such incentives and that means Missouri is missing out. She says a recent example is with the company Square, that makes products to let people accept credit card payments on mobile devices.

“They started out in St. Louis. They couldn’t get investment. There wasn’t enough workers. They went out to (San Francisco) … they’re a multi-million dollar company … by providing a bill like this, by providing this kind of incentive you incentivize those companies to stay here.”

Kansas City Mayor Sly James says the credits would be good for his city.

“Why not create an environment where deep pockets who have money to invest are more willing to do so … when it comes to high-tech startups, Kansas City has created a unique environment that frankly other cities covet.”

No one testified against the legislation.

The sponsors of HB 182 and HB 191 told the committee they plan to strip out other language from the proposals, leaving only the angel investment portions.

Hearing on ‘benevolent’ tax credits becomes abortion, birth control debate

A hearing in the House Committee on Children, Families and Persons with Disabilities on a proposal to extend so-called “benevolent” tax credits turned into a discussion about abortion and birth control on Tuesday.

Representative Genise Montecillo at a hearing of the House Committee on Children, Families and Persons with Disabilities.  (Photo courtesy; Tim Bommel, Missouri House Communications.)

Representative Genise Montecillo at a hearing of the House Committee on Children, Families and Persons with Disabilities. (Photo courtesy; Tim Bommel, Missouri House Communications.)

The hearing was on a bill that would extend tax credits for donations to charitable causes, such as centers that help children in crisis, food banks and more. The debate regarded credits for pregnancy resource centers.

Pro-Choice Missouri Executive Director Pamela Sumners testified that a study revealed many of those centers giving inaccurate medical information regarding abortions and birth control.

“We know that what happens with some of these facilities is that you don’t get the proper information early on, there are delays and sometimes these delays will put people beyond the point at which they can legally get an abortion or put them in a position where the procedure will be more risky to them,” she says.

Sumners discussed some of the findings of that study.

“Sixty-nine percent of these facilities said that there was a link between abortion and hormonal birth control increasing infertility,” she says. “Ninety-two percent wouldn’t tell a woman where she could obtain birth control. Fifty-four percent stated or implied that condoms are less effective in preventing sexually transmitted diseases than they are. Twenty-eight percent told women in their written materials that there is a link between abortion and breast cancer.”

Sumners told lawmakers she wanted them to have the facts before they extended the credit benefitting those centers.

Missouri Catholic Conference spokesman Tyler McClay questioned the definition of what is “medically accurate.”

“I can show you studies that suggest that (abortion is a risk factor for breast cancer),” McClay says. “I can show you studies that say it is not a risk factor. So, I guess the question is, ‘What’s medically accurate?’ That’s going to be difficult to define, I think, in law. That would be my concern with that.”

Rep. Genise Montecillo (D-St. Louis) indicated she will offer an amendment to the bill to require that medical information provided by clinics be accurate.

See the legislation – HB 87.

Rep. Eric Burlison (R-Springfield) says the hearing on his bill about charitable tax credits was hijacked.

“That’s unfortunate because we’re trying to just accomplish something that is very good,” Burlison says. “There’s a lot of good that’s happened in all these benevolent tax credits.”

Barbara Brown-Johnson, president of the Missouri Network of Child Advocacy Centers, testified to urge lawmakers to extend the “children in crisis” credit. She says at her center in Springfield, it yielded $534,000 in four years and over $240,000 in July and August, 2012 alone.

She says one thing it supports is forensic interviewers who interview children going through stressful situations.

“This little boy asked a different kind of question that we’d never been asked before,” Brown-Johnson says. “He looked at the interviewer and he said … he was eight … he said … ‘Yeah, I have a question.’ He said, ‘Can you tell me why people keep hurting me?’ That’s a question no child in Missouri or any state should ever have to ask.”

The legislation will come to a vote in the committee next week.

Committee looks for accountability in tax credit programs

The General Assembly’s Joint Committee on Tax Policy is considering a series of recommendations regarding Missouri’s tax credit programs. But it looks as though it’s going to be a while before those proposals are drawn up and agreed to.

What is known is that there are 54 active tax credit programs in existence that offered $627 million in the 2009 fiscal year. In addition there were 132 tax exemptions. What is not known is the effectiveness of these tax credit programs. And legislators want to take a look at these programs to make sure Missouri is benefitting from them. [Read more...]